By Gugu Lourie
In a move signaling its commitment to South Africa, SAP SA, a unit of German-based enterprise software firm SAP, is strengthening its Broad-Based-Black-Economic-Empowerment (BBBEE) credentials by concluding another empowerment transaction.
SAP South Africa will issue 19.5% shares to The SAP South Africa Empowerment Trust, the beneficiaries of which are previously disadvantaged black students. These beneficiaries will use the dividends received from SAP South Africa to pay for studies facilitated by the Maharishi Institute.
This move will enable SAP to achieve a 30% ownership target in the BBBEE codes applicable to all South African IT companies. Currently, SAP has a 10.5% ownership through BLITEC, a broad-based black IT firm.
BBBEE is designed to widen ownership of the South African economy, which is still mainly in white hands 21 years after the end of apartheid.
SAP rival Microsoft has opted to invest in local businesses because, as with other U.S firms, it cannot sell a stake in its South Africa unit for regulatory and other reasons.
Some BBBEE deals have been criticized by unions and opposition politicians who say they benefit a small group of politically connected black businessmen to the exclusion of the vast majority of poor black South Africans.
The move by SAP is a first of its kind for a multinational firm in the technology industry in SA.
“SAP is passionately driving the Africa innovation technology agenda by focusing on skills developments initiatives that result in sustainable and meaningful empowerment of previously disadvantaged persons. Strategic skills development translates into job creation,” said Pfungwa Serima, CEO, SAP Africa.
“We identified the Maharishi Institute because of its long term track record of success in facilitating the development of skills so that graduates get more than a piece of paper post-training and acquire the life-skills and attitudes essential for the fast changing technology arena in the 21st century.
The beneficiaries of The SAP South Africa Empowerment Trust will obtain access to business degrees, exposure to SAP, one of the leading business software companies in the world, in a way that unpacks their business education in a real-world context and brings it to life.
“We feel the profound choice the company has made in its BEE ownership is an investment into previously disadvantaged beneficiaries and through them, into the future of South Africa for all time,” said Dr. Taddy Blecher, CEO, Maharishi Institute, SA.